SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

6 Months Ended

Jul. 31, 2020

Condensed Financial Information Disclosure [Abstract]

SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

NOTE 18 — SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

The following table presents additional information on selected accounts included in the Condensed Consolidated Statements of Financial Position as of the dates indicated:

	July 31, 2020		January 31, 2020
	(in millions)
Cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	11,221	$	9,302
Restricted cash - other current assets (a)	725		730
Restricted cash - other non-current assets (a)	107		119
Total cash, cash equivalents, and restricted cash	$	12,053	$	10,151
Inventories, net:
Production materials	$	1,884	$	1,590
Work-in-process	677		563
Finished goods	1,041		1,128
Total inventories, net	$	3,602	$	3,281
Other non-current assets:
Deferred and other tax assets	$	6,131	$	5,960
Operating lease ROU assets	1,787		1,780
Deferred Commissions	1,025		998
Other	1,704		1,690
Total other non-current assets	$	10,647	$	10,428
Other non-current liabilities:
Deferred and other tax liabilities	$	2,010	$	3,110
Operating lease liabilities	1,383		1,360
Warranty liability	140		155
Other	1,229		758
Total other non-current liabilities	$	4,762	$	5,383

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(a) Restricted cash primarily includes cash required to be held in escrow pursuant to DFS securitization arrangements and VMware, Inc. restricted cash.

Trade Receivables — Allowance for Expected Credit Losses

Allowance for expected credit losses of trade receivables as of July 31, 2020 includes the impact of adoption of the new CECL standard, which was adopted as of February 1, 2020 using the modified retrospective method, as described in Note 1 of the Notes to the Condensed Consolidated Financial Statements. The provision recognized on the Condensed Consolidated Statements of Income (Loss) during the three and six months ended July 31, 2020 is based on an assessment of the impact of current and expected future conditions, inclusive of the effect of the COVID-19 pandemic on credit losses. The duration and severity of COVID-19 and continued market volatility is highly uncertain and, as such, the impact on expected credit losses is subject to significant judgment and may cause variability in the Company’s allowance for credit losses in future periods.

The following table presents the changes in the Company’s allowance for expected credit losses for the periods indicated:

	Three Months Ended		Six Months Ended
	July 31, 2020		July 31, 2020
	(in millions)
Trade Receivables - Allowance for expected credit losses:
Balance at beginning of period	$	144	$	94
Adjustment for adoption of the new CECL standard (Note 1)	—		27
Provision charged to income statement	11		47
Bad debt write-offs	(9)		(22)
Balance at end of period	$	146	$	146

Warranty Liability

The following table presents changes in the Company’s liability for standard limited warranties for the periods indicated:

	Three Months Ended				Six Months Ended
	July 31, 2020		August 2, 2019		July 31, 2020		August 2, 2019
	(in millions)
Warranty liability:
Warranty liability at beginning of period	$	476	$	500	$	496	$	524
Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties (a) (b)	206		237		354		440
Service obligations honored	(203)		(212)		(371)		(439)
Warranty liability at end of period	$	479	$	525	$	479	$	525
Current portion	$	339	$	355	$	339	$	355
Non-current portion	$	140	$	170	$	140	$	170

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(a)Changes in cost estimates related to pre-existing warranties are aggregated with accruals for new standard warranty contracts. The Company’s warranty liability process does not differentiate between estimates made for pre-existing warranties and new warranty obligations.

(b)Includes the impact of foreign currency exchange rate fluctuations.